[MUSIC] Welcome back. We're going to wrap up lesson six now about the legal evolution of the professional athlete's career in professional golf and tennis. We had an encyclopedic view on the beginning, middle, end of that career which lasts perhaps the longest of any of the professional athletes that we've looked at throughout the course. We want to welcome back Ricky Volante. So, let's start with tennis. Many case studies have been written about Maria Sharapova. We've talked about her a lot throughout this course. What would you say about her brand extension? How would you have been drafting her various contract so as to allow her to diversify across the maximum number of product categories during her peak years? >> Well, again as we've discussed in previous lessons, on Maria Sharapova's point of view. You want to narrowly tailor those categories to allow her to maximize the number that she has. Now in her particular case, she started Sugarpova, which is a very interesting case study in itself, a tennis player being related to that sugar, candy category. I mean however you want to define it, which has been mostly well received but that was certainly thinking outside the box and it was a great job on the part of her and her agent to come up with almost a new category in itself for an athlete. >> How important is creating a logo that you can own at least part of, or license, in this world? Roger Federer, for example, perhaps the greatest tennis player of all time, now represented by Tony Godsick with his own agency. The Federer logo has not gone over so well, contrast that with Lacoste, which is a brand of a former tennis player. How much does it, and contrast that with Palmer, whose brand through the umbrella continues on to make many millions. How important is it to transcend success on the court through a logo? Well obviously if you're able to have the sort of success that a Lacoste or an Arnold Palmer has had, you have now provided a revenue stream that will cover all of your life, and likely your children and their children's lives as well. So, being able to create a logo that is well-recognized and has a specific brand recognition to it is extremely important and essentially the unicorn that all agents attempt to go after. >> The golden bear Jack Nicklaus Gary Player, still very active. Has his own logo and trademark, goes back to publicity rights, extending beyond the athlete, him or herself. Let's go back to tennis, oh let's stay with that. So now we need to talk about career interruption. What happens when this unfortunately did, there's a force majeure event. How do you protect in a contract against what happened to Monica Seles when she was very unfortunately stabbed by a terrorist at the peak of her career? >> Well as you mentioned it would go to the force majeure clause within the agreements that Monica Seles had signed that time. The clause would therefore protect her from certain events that are outside, that are essentially defined as events of god. >> Mm-hm. >> Although in this case was something you, beyond even the control of that, that no one could foresee, and that is the entire purpose of the force majeure clause, to protect the athlete so that their agreements aren't cancelled. In the event that something outside of their control happens which prevents them from playing or being able to perform. >> Okay, what would you recommend as a best practice? That there just be a suspension until she can return to play? Let's just talk hypothetically, terrible force majeure could be an injury, could be a temporary disability for either a golf or a tennis player, what's the best practice as an attorney to the agency? Well, obviously the agency and the attorney will want to maintain those agreements if something happens that is outside of the player's control. They don't want the endorser or the sponsor to have the ability to cancel a contract because of something they simply didn't have control over, so you're going to want to have wording in there that allows those agreements to continue in as you said, once they're healthy or once the weather clears in the case of a tornado or something like that. >> Let's go back to the drafting of the endorsement agreement, the license agreement for a golf or tennis pro, and the clauses that are important therein, let's talk about the term. What if, during the term of an agreement player that's not so well-known takes off, has unprecedented success. Would the term allow for renegotiation if it were heavily negotiated and agreed? Or would the sponsor be able just to ride that success for a low base fee? >> Well it would depend, obviously if the sponsor wanted to take that avenue they certainly could of just riding out the agreement. Because in the end it's a contractually agreed upon. agreement with the specific term. However, on the other side of that, the sponsor wants to maintain that relationship and if an athlete's success allows them and their reputation to boom, you want to capitalize on that. You don't want to keep them on that low figure and then they leave as soon as that agreement is over because of the bad blood that was created by not renegotiating. So obviously you have two choices to make. I would recommend renegotiating at that point and keeping all parties happy so that you can keep a relationship moving forward for the long term as opposed to having short term focus on things. >> As a best practice as we teach in the course, perhaps you want to have the equivalent of an over-under, might I suggest that as a best practice. Hey, if the ranking goes to a certain point there's a reopener, and conversely, if the ranking goes down to a certain point the sponsor would want to reopener. >> Yes, the ways like that, if you have a specific metric that you can use and rankings in golf and tennis are certainly a great way of doing that. Then in that case it just depends on if the athlete's willing to bet on themselves or not. >> Or the sponsor. >> Or the sponsor. >> Let's go to suitability, which is really the heart of tennis and golf. I will now play this racket, I will now shoot this club. How important is it to allow for the player to have discretion in that and what's the high risk high reward strategy versus the low risk low reward strategy as we teach it in this course. >> Well obviously the individual sports of tennis and golf you're club or your racket is extremely important. You want your athlete to feel comfortable while they're using their equipment, and obviously, the more comfortable they feel, the more likely they are to be successful. So, you want to have a suitability clause that allows for them to potentially change out their clubs or their racket to what they're most comfortable with. Now, on the other side of things, when it comes to high risk, high reward, if a player's willing to do it, as we saw with Rory McIlroy, if you're willing to go all in with an exclusivity, binding exclusivity, which means that he will only be able to use that club, you're taking a big risk. As we saw there, that did not necessarily pay off. Yes, you will maximize the number of dollars that you receive in the agreement. However, on the other side of things you're not going to be able to change out your club if you're not successful which can damage your brand in the long term. >> Lets talk about tweaking rights, both sides want tweaking rights. You don't want to must play suitability clause with somebody with somebody who's going down the rank. You want some sort of tweaking right in there before you would end the relationship. >> Yes, and tweaking rights can be different customization's to the player to allow them to maybe a particular degree on the club or something was what was changing as success rate. So having the ability to change things slightly here and there and customizes clubs can be a successful way of going about things. >> Still has to be in Rory's case the Nike club. can't play the tight list, can't play whatever he was playing before. He's being paid 20 million a year. When does the FTC kick in that regard? Not to suggest Rory is up against that but there are federal trade commission guidelines about truth in advertising. >> Yes, in that sense you can't have him put duct tape over top of the Nike logo or something like that or over the Titlist logo that he's secretly using. If you're going to agree to that exclusive contract where you're only using Nike clubs, the FTC is going to make sure you're using Nike clubs if you're getting paid $20 million a year for it. >> Okay, let's go to the extension of this deal, the next deal and a bonus parameters that would attach there too. How important in negotiating these product endorsement agreements, as an athlete nears the end of his or her career, is it, to keep the base at a range that's consistent with the athlete's ranking and start to beef up the bonuses, should he achieve, he or she achieves success, as they're heading toward the twilight of their career? >> Well, in that case, it's a very successful, or very intelligent way for the sponsor to go about things, because you don't want to pay an athlete for what they've already done. You want to pay for an athlete for what they're going to do. So, having low base pays with high bonus rewards, if they are successful and go and win a major tournament or something along the lines they get what they're worth. But at the same time, if production decreases with age which typically is what happens you're not overpaying for some, for the reputation of the past as opposed to, for the reputation of the present. >> As we teach it, in this course Ricky, when is it ever advisable to bite the hand that feed, that has fed you? To bite an event sponsor, to bite the association that has sponsored your play through out your career, publicly available. Dave Lightener has talked about it, Vijay Singh did sue the PGA Tour as the attorney to that agency to Dave as the agent representing Vijay. When is it either necessary or advisable to file such a suit? >> Well in Vijay's case, that was kind of the ultimate step. I mean you went squarely up against the PGA in that sense and he's become somewhat of a pariah within the league as a result. However, his reputation was highly damaged by their allegations of the deer antler spray, and it being a performance enhancer, and he wanted to go back and repair his reputation, and he felt that was the appropriate step to take. again, they're, you're weighing your options. Do you want to go all the way and try to rebuild your reputation in that way, or would you rather just take your punishment stay quiet, keep your head down and go back to trying to win as we've discussed before. >> Just win, supposing now lets finish with publicity rights. Yeah, Yuffi Ellis has a mature near retirement tennis player, we have a hypothetical about this. There's been an exploitation of your rights in connection with a player entry form, even in tennis or a golf tournament and they've created confusion as if there's a false endorsement of you being blended into one of the major sponsors of the tournament and you don't like it, even though you could use the exposure. What kind of advice do you give to a senior player heading toward the end of his or her career if you feel like well, that's the theft of category. They have me looking like, I have, one category, endorsement in connection with the event, and by the way, I do still have a small endorsement in that same category on my own. >> Well, if he has a small category of his own in that, you want to protect your current agreement, which is the one you're getting paid for. If a particular tournament is sponsored by a watch, and you're affiliated with that watch through some sort of vague sponsorship, or pseudo-sponsorship where you're actually already in a watch deal. You're going to want to protect the relationships that you have and you're getting paid for. So in that case you would have take whatever actions are appropriate against the league or against the association to make sure that there isn't that brand muddling in a word, in a sense. But at the same time then you're again, almost biting the hand that feeds. You're going after the players association that you're affiliated with and that can burn a lot of bridges. >> We're all the way back to publicity rights, aren't we, and the exploitation of same categorization, diversification of same? Back to Michael Jordan and Jewel Tea, it's at that point, I supposed where there's this false association, as Craig Nard told us back in that lesson. That it's time to file a cease and desist and then a lawsuit if necessary. Is that a best practice? >> I would say that at that point it is, because you have almost no other option. Unless you want that mismanagement or that misrepresentation to continue to exist and potentially damage your brand or lessen the value of your brand you're going to have to take that appropriate step. >> To miss appropriation of a category is what really it's that stuff that publicity right exploitation possibility for Jordan in the grocery store category. Not that he would ever want to exploit it, but his agent, his attorney would say reserve it, maybe we'll sell it someday. Is that the way you would approach it? >> Yes, I mean you could look at it that way. Another way to look at it is maybe not look at it as the grocery store category, but look at it as products that are maybe affiliated exclusively with only certain grocery stores. So, I mean there's other ways to go about it, but you want to maintain the maximum number of categories that you can have. >> Coming back to golf and tennis and finishing up with that, lots of opportunities teaching pros the senior tours golf course design. Dave talked about this, when do you recommend a broadcast career to somebody like a James Blake? Let's finish with James, who's made eight to ten million both on and off the court could do a lot. You just say to a James Blake hypothetically, you know what, play a little Senior Tour, and then just raise your family for a while. >> That's certainly a great route to go, if you have the intelligence and the ability to hold an audience's attention, then why not go into a broadcasting career in a sport that you're already a master at. Show off your expertise in the subject, and continue to be recognized as a member of the club almost, within the sport. And continue to get paid to do so while you're able to spend more time with your family as opposed to being on the road practicing, playing, and endorsing and things of that nature. >> Is it ever a best practice to say, you know what, I know you extremely well James, I know you don't want to do anything else. I'm okay with that or most, you do have an ethical duty to at least show him deals. >> I would say that you always want to show them deals because if you leave something off the table that ends up becoming a large part or ends up being a large dollar amount that he says wait a minute I would have absolutely done that. You've now opened yourself up to potential litigation. So I would say always take everything to him. It doesn't meant that he's going to accept it, but as his agent, you have a fiduciary duty to take everything to him. >> And turn it the other way around, he says, don't bring me any more deals, I'm done, I'm going to raise my beautiful family. How would you protect yourself with the writing to the file? >> Well, I would get that in writing absolutely, that he no longer wants to be presented with any deals, and could come up with an appropriate document approved by attorneys on both sides that protects you from any future litigation by James, if he were to change his mind. >> Thank you, Ricky. Another great exploration of the publicity rights and the endorsement agreements and the opportunities that present themselves to professional golfers and tennis players primarily, throughout the evolution of their careers. We're very thankful to you for staying with us through each of the six lessons. We want to hear what you have to say. We're going to have some good posts here, some hypotheticals with some templated answers and multiple choice questions just to make sure we're getting through to you and you understand what we've been trying to tell you and share with you. Most importantly we want to hear back from you. We want to understand what questions might still remain as we end this last lesson, and how we might even improve upon this next time we offer it. We just want to thank you for being with us throughout each of the six lessons however, and please do communicate back with us through the Coursera website, because we really value your thoughts, your comments, your insights, your experiences we want to share more of ours with you. [MUSIC]
